With 2025 just beginning, Jacksonville’s industrial real estate market is poised for continued growth and stability, driven by strategic infrastructure developments and sustained demand.
Rate growth and investor activity
Despite fluctuations in vacancy rates, rental rates have shown resilience. Jacksonville’s industrial market recorded steady rent growth over the previous year. CoStar market data shows the average rate is around $10 per square foot on a triple net basis.
This trend underscores the market’s strength and its appeal to investors. The average purchase price reached a record high of almost $100 per square foot, with transaction volumes more than $600 million over the past year.
These figures highlight the robust investor confidence in Jacksonville’s industrial sector, according to CoStar data.
Vacancy rates and construction
For comparison’s sake, in the fourth quarter of 2024, Jacksonville’s industrial market experienced a vacancy rate increase year over year, reaching roughly 6% compared with a little more than 4% in fourth quarter of 2023. This is still below the national average of 7%, CoStar data shows.
This uptick was due to the delivery of new industrial spaces outpacing immediate absorption rates. However, with the port expansion and economic indicators pointing toward growth, it’s expected that these new spaces will be absorbed, leading to a stabilization or potential decrease in vacancy rates as 2025 progresses.
JaxPort
A significant catalyst for this positive outlook is the growth of JaxPort, the largest container port by volume in Florida. As referenced at the recent State of the Port event, enhancements at the SSA Jacksonville Container Terminal specifically are expected to bolster the region’s logistics and distribution sectors, attracting businesses seeking efficient supply chain solutions. Investments in the river deepening and the plans to raise the high voltage transmission lines will allow for much larger ships to the port. The increased port capacity is anticipated to drive heightened demand for industrial spaces.
Outlook
Jacksonville’s industrial real estate market in 2025 will be characterized by strategic growth and stability. The city’s infrastructure developments and economic resilience position the area as a compelling destination.
W. Wade Powers is vice president of public affairs for the NAIOP Commercial Real Estate Development Association Northeast Florida Chapter.